Viking

Look, if you do one thing right (early China travel ban -- which was probably a fluke done because with the trade war he was looking for any reason to pressure China) but then turn around and call it a hoax and no big deal and it'll go away on its own and airtight controlled and give rallies in arenas and and give no clear direction to states and don't mobilize federal agencies for weeks and have incompetents in those agencies (the war on experts for the past 3 years in favor of loyalists/cronies), pre-announce possible quarantines making sure people flee those areas and spread the virus, contradict experts on TV within the very same press conference, etc, you don't get to pretend that you did the right thing early. You still did WAY more damage than good. The first thing to have done would be to have had smart people able to understand the warnings and react rationally to them in the first place, rather than convince millions of people it wasn't a big deal, which by the time that was turned around, you had daily exponential compounding for weeks. If a politician does something well = praise. If a politician does something wrong = criticism If they do one thing right = 1 praise If they do 10 things wrong = 10 criticisms Assuming each of the ‘things’ are of roughly equal importance.

Nice to see politicians are slowly learning to trust science and the facts. It takes some longer than others. Georgia Gov. Brian Kemp, who resisted strict coronavirus measures, says he just learned it transmits asymptomatically - https://www.washingtonpost.com/politics/2020/04/02/georgia-gov-brian-kemp-who-resisted-strict-coronavirus-measures-says-he-just-learned-it-transmitted-asymptomatically/ After resisting a statewide stay-at-home order for days, Georgia Gov. Brian Kemp ® succumbed to the pressure and issued one on Wednesday. Part of the reason, he said, was that he had just learned some new information. Kemp said he was “finding out that this virus is now transmitting before people see signs.” “Those individuals could have been infecting people before they ever felt bad, but we didn’t know that until the last 24 hours,” he said. He added that the state’s top doctor told him that “this is a game-changer.”

In Quebec they have had to go one more step and hire security guards to monitor the fire doors. Visitors have been banned from seniors homes for a few weeks now. However, family members were just showing up at the old folks homes and when they were not allowed in through the main door to visit their family member, some of the residents just sneaked their visitors in by opening the fire doors. What can you do when a portion of the most vulnerable population doesn't agree with the pandemic control measures? I went to the grocery store on Tuesday, and it was packed with geezers. People who are in the 80+ age range should know better than to leave their home to go shopping or to visit family, but some seem to have different risk preferences than the epidemiologists! SJ survival of the fittest operates on the mental fitness domain as well... Great example of lack of education. Reinforces the importance of leadership and the message they communicate. And the importance of trust in government and media. When these conditions are present (South Korea, Singapore, Taiwan) a crisis can be successfully managed. If not, a crisis can morph into a catastrophe.

Are you suggesting hospitals (who are running out) give their masks to multigenerational families? This is common sense?

AERCAP Parks Hotels and Resorts Basket of Cruises StoneCo American Eagle Urban Outfitters Shopify Tesla Facebook Heico Transdigm These are the stocks in general I found has an overhang of bankruptcy but can't see them being BK unless in a real draconian situation - and if that's the case we won't need money. American Eagle/Urban outfitters/Aercap go bankrupt => US dollar loses reserve status/we are back to cavemen is why I think assets can fall a lot farther. Schwab, i think the US will do better than Europe in the coming months/years. What do you see replacing the US$ as reserve currency?

Financially and health wise in a very good situation. Financially, up to 20% stocks and 80% cash. I have been in and out a couple of times; lucky. It has helped me understand the companies i want to own long term. Gregmal, i am determined to NOT sit in cash through the cycle and appreciate your Jiminy Cricket voice in the back of my head :-) Health wise my family of 5 are doing great. My oldest has just returned from university and we are slowly emptying her apartment. My 3 teenage kids are all taking turns cooking and they are actually better than me at a bunch of items (my son recently oven cooked prime rib steaks and then pan fried them in butter and garlic); it is amazing the chefs they follow on the internet. (My Italian wife's line is if you can read you can cook :-). We have lots of young family members we are thinking will need some financial help... we are going to wait a few more weeks and then likely send out a few one time discrete (they tell no one) cash gifts (we have learned over the years to never give anyone a loan... cash gift or nothing). My neighbours across the street are retired with conditions so i have offered to be their grunt as required. My kids also had a Lego business that we are winding down; we have started giving family and neighbour kids gifts of large Lego sets; families are very appreciative. We also are trying to support our favourite local sushi restaurant (gave them a $100 tip last night; they thought it was a mistake and were touched when i told them is was not a mistake :-)

When i worked at Kraft Foods (as a sales person) we closed a distribution center and lots of people lost their job. We were told not to talk to the media. While i would like to hear what health care workers have to say i also understand why the companies want to control what is said to the public and media.

Dynamic, great post. Over the past 10 years i have held BRK in my portfolio more as a bond substitute than an S&P 500 substitute. Sleep well at night holding. $440 billion market cap. 1.) $120 billion in cash. Once in 10 year opportunity to deploy at very attractive rate of return. 2.) Bonds are very short duration; perhaps opportunity to redeploy some during current bond market dislocation at higher yield (i.e. munis) 3.) insurance pricing is in hard market 4.) utility portfolio should chug along Stock portfolio is getting whacked big time; this will be ok for long term shareholders as it is providing Buffett lots of great opportunities to deploy $100 billion

Agreed. Are all those Asian countries (where everyone wears a mask) who have more experience dealing with virus really that stupid? I am getting more concerned about Canada’s response. I am not seeing any urgency around solving testing issues (number and time to process). Looks to me like a very sloth like response. Limited ability to look ahead, innovate (think outside the box) and drive to the optimal solution. The downside of public health care. The old Peter Lynch line (i think) ‘nobody got fired for buying IBM’ regardless of whether it was a good investment at the time. No incentive to be a risk taker.

Gundlach has his next update tomorrow for those who are interested. - https://doubleline.com/latest-webcasts/ You are registered for: DoubleLine's "The Tale of Two Sinks" Webcast Hosted by Jeffrey Gundlach Tuesday, March 31, 2020 1:15 pm PT / 4:15 pm ET

If you think house prices are high where you live in the US try prices in Vancouver or Toronto north of the border. Canada missed the housing crash the US had in 2008. And for the past 10 years prices have gone much, much higher. Housing construction and related industries is a very big part of our economy (larger as a % of GDP, i think, than the US when it had its bubble in 2008). The near term outlook for Van/Toronto real estate is pretty grim: 1.) asian buyers will likely disappear for a while 2.) properties purchased/rented out as air bnb rentals will quickly become uneconomical. Owners will need to have lots of liquidity to ride out the storm or will be forced to put units back on the market (‘hotel’ business is broken for a while) 3.) coming recession will shrink first time buyer demand Having said all that the market has absorbed every punch thrown at it the last 20 years. Free money (rock bottom interest rates) will help. But will that be enough this time? The real risk for housing might be the economy. If the virus-lead mild recession causes the housing bubble to pop then Canada could experience a severe recession in cities like Vancouver and Toronto.

This is good to hear. Keep us posted on developments! So hard to know what is really going on in China. Yes, thanks for the up to date information. Encouraging.

I agree with pretty much everything you wrote. I think it is crucial to keep the timeline to reopen the economy as short as possible and in order for that to happen, new infection rates will need to come down. I think the key moving forward will be how quickly each state is able to pivot to the next stage of the battle: aggressive testing in volume and contact tracing (like South Korea, Singapore and Taiwan). Is this model 4 weeks away from being implemented or 8 weeks away? Big difference for how big the economic contraction is and what the recovery looks like on the other side (V or U). In my province (BC) it does not look like it is on anyones radar (the South Korea model) so my guess is we are in lock down for at least another 6-8 weeks. Disagree with Bernanke unless the natural disaster was something that left a lingering fallout a la nuclear accident, and what natural disaster shuts down the entire United States and Europe and others all at the same time? Here is how I've been thinking things play out: April - Rest of US cities go through the early part of the curve. NYC reaches peak and daily counts start moving downwards. Florida is a shitshow as are rural areas unlucky enough to get an outbreak. Can't re-open yet. May - Growth of daily confirmed cases levels off in the second batch of cities. Cities are still doing >100 cases for most of May. Economically getting very painful. Can't re-open yet though. June - Still in a "soft lockdown" with cases trending downward. Pressure to re-open things, and we'll probably try to do it. July - Same as June with less and less cases. During June & July stores that didn't close permanently open back up to reduced thresholds of people. Aug - New Normal 75% cash right now fwiw. I can't see the economy doing well during the next 5-6 months and there's the chance we get a double-dip outbreak in fall with a more depleted economy and healthcare system. SP 2000-2200 in the next couple weeks I'll add to some things. I am more optimistic on the timeline. Trump just announced social distancing to extend for the month of April. That is very good news. Now all the governors need to get their lock downs in place. This gives all jurisdictions 4 weeks (April) to also get their testing and contact tracing apparatus in place. I see a scenario where the US could start to reopen in a limited sometime in May (if all goes well). I am starting to wonder if the 35% decline we saw last week was not the bottom :-)

From the Washington Post (from March 24; sorry if someone already provided link) Trump is missing the big picture on the economy - https://www.washingtonpost.com/opinions/2020/03/24/trump-is-missing-big-picture-economy/ ...The same logic applies to social-distancing policies. Prematurely abandoning or relaxing social distancing will be disastrous on both economic and health grounds. If restrictions are lifted prematurely, the result will be a follow-on pandemic surge. More people will die. What will the policy choice be then? If it is a return to restriction, starting from a much less favorable point and much more disease spread, then the cumulative economic loss will be greatly magnified. The costs we have already borne will have been totally in vain. ...The president and the business leaders who urge him to abandon a public health orientation to pandemic policy are nonetheless correct to want to move through the current difficult period rapidly as possible. The right focus is not on false hopes. It is on realistic strategies that permit a targeted approach to reducing transmission. That means more testing, more contact tracing, and more and better facilities for those who need to be separated from others or treated. ...There will come a time when we can gradually let up on current restrictions and help the economy in the process. It will be the moment when new case counts are no longer accelerating; when we have adequate measures in place to quickly catch and contain new outbreaks; and when we are confident that we are not endangering hard-won progress by impetuous actions.

I agree with pretty much everything you wrote. I think it is crucial to keep the timeline to reopen the economy as short as possible and in order for that to happen, new infection rates will need to come down. I think the key moving forward will be how quickly each state is able to pivot to the next stage of the battle: aggressive testing in volume and contact tracing (like South Korea, Singapore and Taiwan). Is this model 4 weeks away from being implemented or 8 weeks away? Big difference for how big the economic contraction is and what the recovery looks like on the other side (V or U). In my province (BC) it does not look like it is on anyones radar (the South Korea model) so my guess is we are in lock down for at least another 6-8 weeks.

Spanish flu also intersected with the end of World War I.

I don't see how you can have higher inflation without a financial crisis. Not with everyone geared up to the debt levels they are. Higher inflation leads to higher interest rates and then lower spending the way I see it. My basic understanding is--inflation good for long term debtors. Deflation is what kills debtors (seen in Great Depression). If you have a 30 year mortgage and locked in at 3% interest a year, inflation of 4-5% would make it easier for you to pay the interest/debt off (negative real interest rate for you), especially if you earn a salary which rises with inflation. Coming out of this (12-18 months from now) qmy base case is the US will look much more like Europe (possibly with negative interest rates). I think that scenario is much more likely than we see meaningfully higher inflation.

I mean could we ever really know if the bullet killed the man, or if he happened to die from complications of hypertension just as the bullet entered his skull? Causation can be tricky after all, and we should study it further before deciding conclusively! M. Why would anyone assume the hole in the head was caused by the gun going off? People are always jumping to conclusions. The liberal media has brainwashed everyone.

Clearly I am a simpleton. Are people now looking at low reported results (i.e. low death count) then using that fact to conclude that the response taken (that resulted in the low number) was overdone? So we have a virus. If we do nothing we know we get Wuhan, Iran or Italy. If we test like hell early we get South Korea, Taiwan, Hong Kong or Singapore. If we screw up the initial response (so we have widespread community transfer on a large scale) we know we have to resort to some sort of lock down like China, Western Europe, US and Canada. (India too?) Lock down slows the spread but takes about 2 weeks to start to impact the numbers. And even so, it likely takes another couple of weeks to see total confirmed case numbers really start to decline. For example, are people suggesting that as we see the numbers in Washington State start to turn down in the next couple of weeks (and the death count does not mushroom higher) that that is proof that the lock down as implemented was way overdone and the issue was ‘blown way out of proportion’?

Here is another perspective as of today from a German, now living in the US. For the First Time, I’m Doubting My Decision to Come to America - https://www.theatlantic.com/ideas/archive/2020/03/stayed-germany/608980/

Update of what is going on in Germany. Encouraging. Germany has a remarkably low coronavirus death rate — thanks largely to mass testing, but also culture, luck, and an impressive healthcare system - https://www.businessinsider.com/germany-why-coronavirus-death-rate-lower-italy-spain-test-healthcare-2020-3

Orthopa, have you spent any time looking at what happened in China the last 3 months. The liberal media had nothing to do with their outbreak and the human catastrophe that followed. Read this last line again and think deeply :-) And today, China is far, far from returning to normal. I know, liberal media hysteria is responsible for that too :-)

Yeah, I think the people that have this view are basically misunderstanding five things: [*]Exponential growth [*]It takes weeks between infection and hospitalization and death [*]Hospitals are not infinitely expandable--if enough people come in, hospitals run out of resources [*]If you're in the ICU with this, you are likely in there for weeks [*]That without ventilators, the death rate increases dramatically Everyone I've seen who's taken a "there's no problem" position seems to have basically missed at least one of these points. In that post, he's certainly completely misunderstanding points 1 and 2. He'll probably miss points 3, 4, and 5, but hasn't got to that point yet, because he's so busy missing 1 and 2. I think he needs to get off his couch and broaden his perspective and go work in a hospital in Washington State or New York City right now. My guess is he is after ‘view count’ and the article he wrote will be a best seller.

Yep, another Trump guy with his "This is like the flu take". Thank you! ::) Rip Van Winkles nephew? Been asleep for the past month and just woke up...

Would this not have been the right thing to do in Washington State and New York City about 3 weeks ago? The cat is clearly out of the bag. Perhaps the situation in New York is worse than generally recognized. Or perhaps the federal response is running about 3 weeks behind what it should be? Trump says he is considering coronavirus quarantine on New York, parts of New Jersey and Connecticut - https://www.washingtonpost.com/world/2020/03/28/coronavirus-latest-news/